QuadrigaCX sees over $20M frozen as Canada’s ‘banking cartel’ steps up crypto attacks

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The mainstream financial world has been outwardly hostile towards cryptocurrencies for some time. Banks in Canada have exemplified this attitude in recent months, withdrawing essential banking services from cryptocurrency businesses while continuing to ratchet up their anti-crypto rhetoric.

Some analysts say this is in response to the direct threat posed to banks and traditional fiat banking systems by cryptocurrencies like Bitcoin, which offer fast international payments, low transaction fees and absolute security without the need for banks or other centralised institutions.

Now, in the latest example of banks taking exception to promising crypto businesses, press reports have revealed that Vancouver-based QuadrigaCX has been facing a freeze on assets worth as much as CAD28 million (US$21.6 million).

According to The Globe and Mail, the firm has been unable to access its account funds since January of this year. With the backing of local courts, the Canadian Imperial Bank of Commerce (CIBC) froze a number of accounts connected to the firm, on allegations that it was unable to determine who legally owned the funds.

Subsequently, the bank has asked to court to rule on whether the bank can seize the funds to determine whether they belong to Quadriga, its affected customers, or the firm’s payment processor.

In response to the attacks on their assets, Quadriga has responded robustly, accusing the bank of an orchestrated attempt to squeeze their business for its affiliations with the cryptocurrency sector.

According to legal representatives for the exchange, the implication that Quadriga was involved in unsavoury businesses practices is untrue and “highly offensive.”

“This court should not succumb to the bank’s unsubstantiated and highly offensive speculation that there must be shady dealings afoot because Quadriga’s business is a trading platform for individuals trading in cryptocurrencies.”

In an email sent to customers impacted by the freeze, Quadriga said a “Canadian banking cartel” was intentionally making life difficult for them, and other crypto businesses, to encourage adoption in Canada.

This incident is but the latest in a series of similar swipes at the cryptocurrency sector from banks, both in Canada and further afield.

However, with Quadriga rival Coinsquare recently establishing a formal banking relationship with one of the country’s biggest banks, there remains some optimism that this attitude might be beginning to change, in favour of supporting the development of the nascent crypto sector there.